Michigan VC Roundup: Good News Abounds

6/27/13Follow @XconomyDET

—The Detroit-based Renaissance Venture Capital Fund (RVCF) announced its initial investment of $16.7 million in 20 Michigan companies has led to a return of nearly $300 million. Xconomist Chris Rizik, who is the fund-of-funds’ CEO, says it’s great when a plan works out.

“We hoped ultimately that the money could be leveraged eight times, since if you look nationally, funds are usually leveraged five to eight times,” he explains. “We’re at about 17 times right now between funds coming in and bringing other VCs into deals. We’re probably more than double the national numbers.”

The RVCF was originally formed in 2008 by a group called Business Leaders for Michigan with the intent of bringing together the state’s venture capital, business, and entrepreneurial communities to help foster statewide economic growth.

In 2012, the RCVF more than doubled in size thanks to partnerships with big corporate investors like Ford and major philanthropic organizations. The RVCF is the largest privately funded entity of its kind in the nation.

Right now, the fund is worth $110 million, which Rizik hopes to have fully invested in about seven years. By that time, the RCVF projects it will have generated a return of more than $1 billion and thousands of jobs created.

Rizik says the key to success has been to invest in solid funds that can make things happen in an underserved market. Also key is the work the RVCF has done attracting out-of-state funds, some of which have come back for repeated investments.

“I’m optimistic because the quality of companies here in Michigan is higher than it’s ever been,” Rizik adds. “We have great technology, great engineers, and a growing pool of leadership. The amount of available capital is up, especially relative to the rest of the nation. We’re clicking on more cylinders than ever before, but we’re not out of the woods yet.”

—The Ann Arbor-based Huron River Ventures announced the final close on its Huron Ventures I early stage fund, at $11 million. Huron River Ventures was launched in 2011 to invest in companies working on technologies in the energy, transportation infrastructure, and agricultural sectors.

Current investments include SideCar Technologies, Ambiq Micro, OptoAtmospherics, FarmLogs, Root3 Technologies, and Covaron Advanced Materials.

Beringea, with an office in Farmington Hills, announced one of its portfolio companies has been acquired. Pioneer Surgical Technology, based in Marquette, MI, has been acquired by RTI Biologics for $130 million. Pioneer Surgical Technology manufactures metal and synthetic products for orthopedics, biologics, spine, cardiothoracic, and trauma markets.

Beringea also announced it has invested in Fiber By-Products Corporation, located in Pigeon, MI. Fiber By-Products Corporation is a processor, recycler, and manufacturer of wood products.

Sarah Schmid is the editor of Xconomy Detroit. You can reach her at 313-570-9823 or sschmid@xconomy.com. Follow @XconomyDET

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